Daily Market Analysis from ForexMart

XAU/USD. Analysis and Forecast

On Tuesday, gold continues its sideways consolidation but remains near the two-week high reached the day before. The U.S. dollar is regaining ground, partially recovering losses from Friday's session caused by weaker-than-expected U.S. employment data.analytics6891cf665d084.jpgThis rebound in the dollar is a key factor capping the upside for gold prices. Additionally, the currently dominant risk appetite in the market limits the potential for further gains in this safe-haven asset.

However, a strong dollar rally appears unlikely, as market participants continue to expect the Federal Reserve to begin a new rate-cutting cycle in September. These expectations are supported by signs of deterioration in the U.S. labor market. As a result, this continues to provide some support to gold prices, preventing a sharp decline. Moreover, lingering uncertainty in trade relations contributes to limiting downside pressure on the precious metal.

China and the U.S.—the world's two largest economies—have yet to reach a final agreement on trade issues. U.S. Treasury Secretary Scott Bessent noted that the decision to extend the 90-day tariff truce, which expires at the end of the month, will be made personally by President Donald Trump. This uncertainty continues to keep investors on edge and may support demand for safe-haven assets.

From a technical perspective, Friday's breakout above the 200-period Simple Moving Average (SMA) and the $3335 resistance level, followed by continued strength, favors the bulls. Moreover, daily chart oscillators are gaining positive momentum, confirming a bullish outlook. Therefore, any further pullback below the immediate support at $3365—where the price is currently hovering—could be viewed as a buying opportunity, with downside likely limited to the $3350–3349 area. A break below this zone, however, would expose gold to accelerated losses toward intermediate support at $3330–3315, en route to the psychological level of $3300.

On the other hand, yesterday's high around $3385 is the nearest barrier before the $3400 psychological level. A sustained move above that could pave the way for further gains toward the next key resistance near $3435. Bullish momentum may then strengthen further, lifting XAU/USD toward its all-time high around the $3500 psychological level, last reached in April.
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Experts predict the growth of GBP/USD to 1.40 by the middle of 2026

The British pound declined against the US dollar against the background of the general strengthening of the US currency, UBS analysts say. At the same time, the pound lagged slightly behind other European currencies, which led to a slight increase in the EUR/GBP pair above the 0.86 level.

The bank's experts report that the latest macroeconomic data from the UK indicate a slowdown in economic growth and a weakening labor market. However, high inflation and steady wage growth constrain the Bank of England's ability to quickly ease monetary policy.

UBS expects the Bank of England to cut the rate only twice by 25 basis points by the end of the year, which is in line with market expectations. Against the background of persistent interest rate differentials, the pound remains attractive for a carry trade, especially in pairs with low-yield currencies such as the Swiss franc.

The investment bank's analysts still recommend the GBP/CHF carry trade strategy, and the pound's fall below 1.33 is described as an opportunity to hedge dollar positions. In the medium term, the bank forecasts the GBP/USD pair to rise to 1.40 by mid-2026.

At the same time, it is expected that the potential for further growth of the pound is limited. In the short term, UBS suggests selling GBP/NOK with growth above 13.90, and also draws attention to the possible strengthening of the Norwegian and Swedish krona against the pound.
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The Bank of England lowered the rate for the third time in 2025 – now to 4%

Following the August meeting, the Bank of England lowered its key rate by 25 basis points to 4% per annum. This is the third decrease since the beginning of the year, each of which amounted to 0.25 percentage points. The decision coincided with market expectations.

The Central Bank noted that inflation in the UK has slowed significantly over the past 2.5 years due to tight monetary policy. This allowed the mitigation cycle to begin. However, the price growth rate remains above the target. In June, inflation accelerated to 3.5% due to higher prices for energy and food.

Wage growth is still high, but it has begun to decline and is projected to continue slowing until the end of the year. The Bank of England believes that inflation will peak in September (about 4%) and begin to decline towards the target level of 2% in the medium term.

The UK economy is showing weak growth amid a weakening labor market. The regulator warned that further steps to lower the rate will be cautious and depend on the dynamics of inflationary pressure. MPC continues to closely monitor the impact of wage growth on consumer prices.

After the decision was published, the pound sterling strengthened against the dollar — the GBP/USD pair rose to $1.3408. At the same time, the British FTSE 100 stock index fell by 0.7%.
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A new Fed member – a potential source of risk

Yesterday, the dollar fell in response to news that U.S. President Donald Trump had appointed Council of Economic Advisers Chair Steven Miran as a member of the Federal Reserve Board of Governors. "He has been with me since the start of my second term, and his experience in the world of economics is unmatched. I am confident he will do an outstanding job," Trump said.

The president noted that Miran, whose candidacy must be confirmed by the U.S. Senate, will serve only until the end of Fed Governor Adriana Kugler's term, which expires in January.

The decision, seen by markets as unexpected and unorthodox, triggered a wave of concern about the future independence and stability of U.S. monetary policy. Investor reaction was driven by several factors. First, while Miran is a respected economist, he has no experience working at a central bank, raising questions about his ability to manage the complex processes of monetary regulation effectively. Second, appointing someone closely linked to the president's administration calls into question the Fed's independence, which has traditionally been a cornerstone of the U.S. financial system. Increased political influence over the Fed could lead to unpredictable consequences, such as artificially lowering interest rates to stimulate the economy in the short term at the expense of long-term stability. Investors fear this could undermine confidence in the dollar and trigger capital outflows.

Miran, who holds a PhD in economics from Harvard University, recently supported Trump's call for interest rate cuts. He is known for presenting his views more measuredly than many of Trump's other advisers. Nevertheless, he has sharply criticized the Fed and proposed changes to the central bank's operations that some might consider unconventional.

Some economists and analysts said Miran was an unexpected choice but one that fits current market needs. "Miran will be another voice in favor of a potentially more accommodative Fed policy. This strengthens confidence that the Fed will cut rates more aggressively before year-end, as it's unlikely the Fed will maintain current rates with three dissenting votes on the Board of Governors. We have officially entered an easing cycle for the markets," Integrity Asset Management said.

Other commentators were more skeptical about Miran's potential influence. "Overall, he is just one member of the entire committee, and he is not going to introduce structural changes or push for a more substantial rate cut," said analysts at the Mercatus Center at George Mason University.

The U.S. Senate is currently on its annual August recess and is not scheduled to return to Washington until early September. While Miran recently passed a confirmation process for his current position, his new appointment could still take several weeks to approve, even if Republican leaders prioritize the nomination.

EUR/USD technical picture – Buyers now need to secure the 1.1690 level. Only then will they be able to target a test of 1.1730. From there, the path opens toward 1.1760, though doing so without support from major players will be challenging. The ultimate target remains the 1.1800 high. In the event of a decline, significant buying activity is expected only near 1.1655. If no buyers appear there, it would be preferable to wait for a retest of the 1.1610 low or consider long positions from 1.1565.

GBP/USD technical picture – Pound buyers need to break the nearest resistance at 1.3450. Only this will allow them to aim for 1.3475, above which it will be difficult to advance. The final upward target would be the 1.3502 level. If the pair falls, sellers will try to retake control at 1.3405. If they succeed, a breakout of the range will deal a serious blow to the bulls' positions and push GBP/USD toward the 1.3375 low, with potential to reach 1.3350.
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European Futures and Wall Street Strengthen, Oil Loses — What's Happening in the Markets?

Global equities extend their rally
Stock markets remain buoyant. Japan and Taiwan posted fresh record highs, while China's blue chips reached their strongest levels in ten months.

Earnings season lifts Europe and Wall Street
European futures added around 0.2 percent, mirroring gains in US contracts. Investor sentiment was boosted by a robust reporting season. According to Goldman, earnings per share for the S&P 500 grew 11 percent year-on-year, with 58 percent of companies raising full-year forecasts.

Retail giants in the spotlight
This week will shed light on consumer spending trends as Home Depot, Target, Lowe's and Walmart release their quarterly results.

Spotlight on Jackson Hole
The highlight for monetary policy watchers will be the annual Federal Reserve symposium in Jackson Hole. On Friday, Fed Chair Jerome Powell is expected to deliver remarks on the economic outlook and monetary stance. A Q&A session, however, does not appear to be on the agenda.

The event will also feature European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey in panel discussions.

Rates and bond market tensions
Futures currently price in roughly an 85 percent chance of a Fed rate cut in September. Any shift toward a less dovish tone from Powell could weigh heavily on bond markets.

While short-term yields remain elevated due to Fed expectations, long-term investors continue to worry about inflation, fiscal deficits and the politicization of monetary policy — concerns that are steepening the yield curve.

European bonds react to rising defense costs
Yields on European government bonds continued to climb, partly reflecting expectations that governments will need to borrow heavily to finance expanding defense budgets.

Asia opens the week with cautious optimism
Asian equity markets posted modest gains on Monday ahead of a week expected to be pivotal for US interest rate policy. Oil prices, meanwhile, slipped as the perceived risks to Russian supply appeared to ease.

Record highs in Japan and Taiwan
A stronger appetite for risk pushed Japanese and Taiwanese stock benchmarks to fresh all-time highs. In China, blue chip shares advanced to their strongest level in ten months.

Fed rate cut expectations
Investors currently assign about an 85 percent probability to a quarter-point cut at the Federal Reserve's September 17 meeting, with further easing anticipated by December.

Cheaper borrowing supports equities
The prospect of lower global borrowing costs underpinned stock markets. Japan's Nikkei gained 0.9 percent, reaching yet another record high.

Mixed moves across Asia
The MSCI Asia-Pacific ex-Japan index edged lower after touching a four-year peak last week. Chinese blue chips rose another 1 percent, extending their quarterly gain to nearly 8 percent.

European and US futures extend gains
Eurozone futures showed modest strength, with EUROSTOXX 50 and FTSE both up 0.2 percent and DAX futures advancing 0.1 percent. US markets mirrored the trend: S&P 500 futures rose 0.2 percent, while Nasdaq futures gained 0.3 percent, hovering near record territory.

Earnings season boosts market confidence
Investor sentiment was bolstered by a strong earnings season. S&P 500 companies reported an 11 percent year-on-year increase in earnings per share, with 58 percent of firms raising their annual forecasts.

Tech giants keep outperforming
According to Goldman Sachs analysts, the earnings of the largest technology companies remain outstanding. Even before Nvidia publishes its results, the so-called Magnificent Seven are estimated to have boosted earnings per share by 26 percent year-on-year in the second quarter, beating pre-season consensus forecasts by 12 percent.

Spotlight on consumer demand
This week will be crucial in assessing household spending power, with key earnings reports expected from Home Depot, Target, Lowe's and Walmart.

Bond markets under pressure
Expectations of a Federal Reserve rate cut have capped short-term Treasury yields, while long-term bonds remain under pressure from stagflation concerns and the mounting budget deficit. This dynamic has created the steepest yield curve since 2021.

European debt markets are facing similar challenges. Anticipation of heavier borrowing to fund defense budgets has pushed German long-term bond yields to their highest levels in 14 years.

Dollar weighed down by Fed expectations
The prospect of looser Fed policy weakened the US dollar, which slipped 0.4 percent against a basket of major currencies last week to 97.851. The greenback firmed slightly versus the yen to 147.46, while the euro held steady around 1.1701 after gaining 0.5 percent in the previous week.

The dollar performed strongest against the New Zealand currency, amid expectations that the Reserve Bank of New Zealand will cut rates to 3 percent on Wednesday.

Commodities show mixed signals
In commodities, gold hovered at 3343 dollars per ounce after a 1.9 percent weekly loss.

Oil prices faced resistance after Donald Trump backed away from threats to impose new restrictions on Russian exports. Brent crude slipped 0.2 percent to 65.74 dollars a barrel, while US crude eased 0.1 percent to 62.76 dollars.
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